What Is an Offshore Bank?

International financial business branches (English: Offshore Banking Unit, OBU, also known as offshore banks or offshore banks) refer to banks where depositors open accounts outside their place of residence (in contrast, banks located in the country where the depositors live are called " Onshore banks "or" domestic banks ") usually have lower taxes (or tax exemptions) and have financial and legal advantages.

International Financial Business Branch

Right!

International financial business branches (English: Offshore Banking Unit, OBU, also known as offshore banks or offshore banks) refer to banks where depositors open accounts outside their place of residence (in contrast, banks located in the country where the depositors live are called " Onshore banks "or" domestic banks ") usually have lower taxes (or tax exemptions) and have financial and legal advantages.

Chinese name

Offshore Banking means mainly dealing with non-residents

High privacy (see also bank secrecy, source from Swiss Banking Act 1934)

Less legal regulation

Convenient deposits (less stringent controls)

Protecting local political or financial stability

The motivations for depositors to open offshore bank accounts may be as follows:

Bank located

On the other hand, offshore banks have the following problems:

Offshore banks are also a common place used by the underground economy and criminals for money laundering, and thus have a bad reputation.

Encourage residents to avoid or evade taxes.

Because it is not in the place of the depositor's residence, inconvenience may arise in the service of depositors.

The starting point for opening an offshore bank is generally higher, so it mainly serves people with higher income.

Legally, foreign banks do not protect personal income tax interest. Except for those who meet the complex requirements, many countries do not have individual income tax rates that differ between domestic and foreign income taxes.